Cash-flow investments

October 25, 2007 | Filed Under Real Estate Trends and Statistics, Real Estate Investment, Mortgage and Finance 

So you want to invest in real estate. You want to buy a condo and rent it out for a decent cash-flow, say 7%-10% return on investment (down payment) per year, after all expenses of course. You have heard all over the media that it’s a buyer’s market and foreclosures are up; so why can’t you find a condo with positive cash-flow?

The large majority of properties currently on the market, even in the student saturated neighborhoods of Allston and

Brighton, will barely carry themselves let alone bring you wads of cash during the first year. I am even talking about the short sales and foreclosures now on the market…with 20% down! I am not suggesting you purchase something with negative cash-flow, but I am suggesting that you look for potential. You may need to invest a few thousand dollars upfront in simple upgrades like new bathroom tiles or appliances. That investment will be well worth it when you will find it easy to raise the rent. Another option is to think big. Purchase a three family or multiplex building. In the long run, you will have less expenses as all the units will be under one roof (ie: there will only be ONE roof to eventually fix). You will also have full control of the budget and running of the building, giving you the freedom you need to make the changes needed to actively increase the value of your investment.

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